USD/TWD is the exchange rate of the US dollar against the Taiwan dollar, the currency of a semiconductor-manufacturing powerhouse. The Taiwan dollar is closely tied to the global technology cycle and export demand for chips. Taiwan's central bank is known to manage the currency actively to support exporters, keeping it relatively stable but sensitive to technology and geopolitical developments.
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Taiwan's central bank holds policy rate at 2%, signals tightening bias
Taiwan's central bank held its policy rate at 2% on the 17th, as markets had expected. The move reflects a tech-driven economy that remains strong and relatively mild inflation, but the bank signaled that its policy stance is tilted toward tightening. Governor Yang Chin-long told reporters after the quarterly monetary policy meeting that the stance of monetary policy does not follow other countries but walks its own path, noting that while rates have not been raised, monetary adjustment is moving in a tightening direction. According to the governor, two board members voted against the decision to hold rates, citing inflation concerns, and said they would act if inflation continues to rise in 2027. The central bank slightly raised its forecast for consumer price index growth in 2026 to 2.03% from 1.91% projected in June, while expecting it to slow to 1.83% in 2027. It raised its 2026 economic growth forecast to 11.48% from 9.45% as of June, and said growth would slow to 5.82% in 2027. Growth in 2025 was 8.68%, the fastest in 15 years.
Goldman Sachs is bullish on the South Korean won, Taiwan dollar, and Malaysian ringgit, arguing that the artificial intelligence investment boom now shapes Asia's foreign exchange market. The bank ranks those currencies above energy importers such as the Thai baht and Indonesian rupiah, which it expects to keep lagging. Goldman economists forecast South Korea's current account surplus will almost double to roughly 300 billion dollars this year, equal to 13.9% of GDP, while Taiwan's surplus is projected to reach 25% of GDP. The Malaysian ringgit is supported by resilient AI-led growth, strong exports, and sustained foreign direct investment. Market data shows all three AI-linked currencies have lost ground against the dollar index in 2026, with the won down 1.64%, the ringgit down 0.67%, and the Taiwan dollar down 3.05%, yet they have outperformed energy importers like the baht, which fell 5.97%, and the rupiah, which dropped 7.30%.
Taiwan Dollar Falls to April 2025 Low as NT$2.5 Trillion Dividend Season Begins
The Taiwan dollar fell to its weakest level since April 2025 on Thursday, dropping as much as 0.6% to 32.210 per US dollar, as stronger US dollar momentum and seasonal dividend outflows weighed on the currency. Taiwan is entering a sensitive period with domestic firms expected to distribute more than NT$2.5 trillion, or $77.7 billion, in cash dividends this year, the largest amount in Bloomberg-compiled data going back to 1990. Taiwan Semiconductor Manufacturing Company paid its quarterly dividend on Thursday, and Australia & New Zealand Banking Corporation's Khoon Goh said dividend repatriation by foreign holders was likely weighing on the Taiwan dollar, with the currency potentially moving toward 32.5 per US dollar as more payouts arrive later this month. Expectations for higher-for-longer US interest rates and a rebound in oil prices tied to renewed Middle East tensions have added pressure, while traders noted foreign investors remitted large sums overseas. Taiwan's central bank was said to have asked local banks to process some large US dollar sell orders on the day received, and Governor Yang Chin-long told lawmakers that good exports and moderate inflation provide a solid foundation for Taiwan to handle a stronger US dollar.
USDTWD.FOREX · Monetary · Positive Stronger US dollar momentum and dividend outflows weaken TWD; central bank intervention supports TWD but not enough to reverse trend.
2330.TW · Capital · Negative TSMC's dividend payment contributes to TWD weakness and foreign repatriation, but impact on TSMC itself is indirect and minor.
Taiwan Dollar weakness moderates on central bank guidance
The Taiwan Dollar's recent weakness is moderating, partly due to guidance from the Central Bank of the Republic of China that banks execute large US dollar sell orders immediately, bringing forward natural supply, according to OCBC's Christopher Wong.
USDTWD.FOREX · Monetary · Negative Central bank guidance to banks to execute large USD sell orders immediately strengthens TWD, moderating its weakness.
The Taiwan stock market is expected to face continued selling pressure on Thursday after three straight sessions of losses totaling more than 670 points. The Taiwan Stock Exchange closed slightly lower on Wednesday, easing 11.49 points or 0.04 percent to 27,525.17, with mixed performances across sectors. The negative lead from Wall Street, where the NASDAQ plunged 1.81 percent and the Philadelphia Semiconductor Index dropped 3.8 percent, is weighing on sentiment. Meanwhile, Taiwan's central bank is set to announce its interest rate decision later today, with expectations it will keep the benchmark lending rate steady at 2.00 percent.
USDTWD.FOREX · Monetary · Positive Central bank expected to keep rates steady, no change in monetary policy; negative lead from Wall Street and tech selloff weigh on Taiwan dollar sentiment.
Taiwan Shares Expected to Open Lower on Profit Taking
The Taiwan stock market is tipped to open in the red on Thursday, with profit taking likely after four straight sessions of gains that added more than 2,750 points to the Taiwan Stock Exchange, leaving it just above the 45,875-point plateau. The TSE finished modestly higher on Wednesday, rising 68.20 points or 0.15 percent to 45,877.39, led by finance and plastics sectors while technology stocks were mixed. The negative lead from Wall Street, where the Dow dropped 507.12 points, the NASDAQ slumped 354.69 points, and the S&P 500 sank 91.25 points after the Federal Reserve held rates steady but signaled potentially higher rates by year-end, is expected to weigh on Asian markets. Taiwan's de facto central bank is set to announce its interest rate decision later today, with no change expected from the current 2.00 percent.
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